Here are five tips to face the 25% tariffs on imports into the United States from Mexico and Canada starting March 4.
U.S. President Donald Trump ordered the application of a 25% ad valorem tax on all imports from Mexico, with some exceptions. This measure, effective from the first minute of March 4, follows an update to Executive Orders 14194 and 14198.
Previous negotiations between the two countries sought to defer these tariffs in exchange for strengthening the northern border and addressing issues such as drug trafficking, migration and security. In addition, Trump confirmed a 10% increase in tariffs on China, accumulating a 20% hike in his second presidential term.
Tips to face the 25% tariffs
For starters, Chapter 98 of the Harmonized Tariff provides importers with options to reduce or avoid tariffs under certain conditions. For example, products exported and then returned to the United States, regardless of their country of origin, are exempt from duties under heading 9801.
In addition, heading 9802 allows the value of U.S. components in products assembled abroad to be deducted. This reduces the amount subject to duty at the time of importation.
A third tip: in some cases, goods imported only for export or for incorporation into other products may benefit from temporary importation under bond. This option is useful to optimize costs and facilitate trade.
Another aspect is that the application of de minimis tariff benefits remains in effect as long as the Secretaries of Commerce and the Treasury refer otherwise. Therefore, temporarily all shipments under this scheme of less than US$800 are duty free.
Finally, U.S. Customs will not charge duties on humanitarian goods (medicine, food and clothing donated to alleviate human suffering), or on informational materials and products for personal use included in the accompanied baggage of persons arriving in the United States.
Canada
The tariff to Canada excludes products from the energy sector, such as oil and gas. For these, a reduced tariff of 10 percent will apply.
In response, Canada will apply tariffs of 25 percent to goods imported from the United States worth 30 billion Canadian dollars. This measure is effective immediately and will remain in place until the United States eliminates its tariffs against Canada.
In addition, this action is part of a broader retaliation, which will affect U.S. imports totaling 155 billion Canadian dollars. The remaining 125 billion will be added after a 21-day consultation period.
The first tranche of the retaliation includes 1,256 products, including orange juice, peanut butter, household appliances, clothing, footwear, motorcycles, cosmetics, paper, poultry, beef, sports equipment, oranges, yogurt, fish, textiles, tea, bourbon, fruit, fruit juices, vegetables, perfumes, furniture, wine, spirits, beer, coffee and plastics.